The Securities and Exchange Commission yesterday sued Nadel, who heads Sarasota, Fla.-based hedge fund Scoop Management, alleging that he misled investors and inflated the value of the six funds he managed. The agency also won a freeze of Nadel’s assets, as well as those of the suit’s other defendants.

Nadel disappeared last week, leaving behind a suicide note. But in a case with parallels to Bayou Group founder Samuel Israel’s disappearance last year, authorities do not believe that Nadel has killed himself, and reportedly traced him to the New Orleans area this past weekend.

According to the SEC’s charges, filed in federal court in Tampa, Fla., Nadel overstated the value of his hedge funds by about $300 million; the $50 million in payouts he owed investors last week are apparently all that was left in the funds. Of course, even that $50 million may not exist: The SEC says that Nadel’s funds appear to have less than $1 million in assets. In addition, authorities believe Nadel recently transferred at least $1.25 million from two of his funds to himself.

In addition to Nadel and the Scoop entities, the lawsuit named several relief defendants, including Valhalla Management and Viking Management, investment firms that Nadel subadvised funds for, as well as his six funds. With the exception of Nadel himself, all of the other defendants agreed to the asset freeze without admitted or denying the charges.

"Investors should be able to rely on the truthfulness of an account statement and offering materials," David Nelson, who heads the SEC’s Miami office, said. "Mr. Nadel's alleged actions deceived investors, and we are seeking to hold him accountable for that misconduct."

While the Sarasota County Sheriff’s Office has closed its missing persons investigation of Nadel, the SEC and Federal Bureau of Investigation continue to search for him.